REPORT OF THE BOARD OF DIRECTORS TO THE EXTRAORDINARY GENERAL MEETING DATED 6 SEPTEMBER 2018

Transcription

1 FONCIERE DES RÉGIONS Société anonyme with a share capital of euros Registered office: 18 avenue François Mitterrand Metz RCS Metz REPORT OF THE BOARD OF DIRECTORS TO THE EXTRAORDINARY GENERAL MEETING DATED 6 SEPTEMBER 2018 Ladies and Gentlemen, Dear Shareholders, We have called this extraordinary general meeting of Foncière des Régions (the Company or Foncière des Régions ) to submit to you the following resolutions: 1. Review and approval of the merger by incorporation of Beni Stabili by the Company Approval of the terms and conditions of the Merger Plan; 2. Withdrawal right of Beni Stabili shareholders; 3. Delegation of power granted to the Board of directors to acknowledge the definitive completion of the merger and the share capital increase resulting from the merger; 4. Transfer to the Company of the commitments of Beni Stabili relating to the convertible bonds of Beni Stabili and waiver of the preferential subscription right of the shareholders to the benefit of holders of convertible bonds of Beni Stabili; 5. Change of corporate name and subsequent amendment of article 2 of the articles of association; 6. Amendment of the articles 8.2, 25.3 and 25.4 of the articles of association; 7. Power for formalities. The purpose of this report is to set out the draft resolutions approved by the Board of directors of the Company on 19 July 2018 and which approval is recommended by the board of directors. The presentation of the financial situation, the operations and the results of the Company since the beginning of the ongoing fiscal year, as well as the various information required by applicable laws and regulations, are provided in the half-year financial report of the Company as of 30 June 2018, which will be published on the website of the Company and which you are invited to refer to. The main events which took place in respect of you Company and its subsidiaries since the beginning of the fiscal year relate to the completion of the following transactions: 17 January 2018 Foncière des Régions is granted two awards at the Grands Prix de l Immobilier organised by CFNEWS IMMO: the award in the Diversification category for its new offer in flexible and co-working spaces, and the award in the Hotel Trade Transactions category, praising the merger of the hotel trade investment structures of the Group, namely Foncière des Murs and FDM Management.

2 14 February 2018 Dominique OZANNE, Hotel Trade Chief Executive Officer of Foncière des Murs, is appointed Deputy Chief Executive Officer of Foncière des Régions for a term of four years (until the end of 2021). Laurie GOUDALLIER is appointed to the Direction Committee as Chief Digital Officer, in charge of managing the digital transformation of the group in Europe, focusing on a client-centred organisation. 19 February 2018 the ERASMUS + France agency enters into a lease agreement as lessee, for a term of 9 years and 3 months, for square meters of offices in the tertiary-sector real estate property Quai 8.2 in Bordeaux, bringing to 39% the rate of precommercialisation of the transaction. 6 March 2018 Foncière des Régions, partner of the transformation of companies, broadens its offer and introduces its brand of flexible spaces: Wellio, a unique partnership between its hotel trade expertise and its experience in work environments. 3 May 2018 Foncière des Régions further develops its development in the hotel trade sector in Europe by signing, through its hotel-trade dedicated subsidiary Foncière des Murs, an agreement with Starwood Capital for 976 million euros regarding the acquisition of an emblematic portfolio of 4 and 5-star hotels, located in the main cities of the United Kingdom. 25 May 2018 Following the approval of the board of Beni Stabili, on 24 May 2018, the Board of directors of the Company approves the merger project between the two companies on the basis of a merger exchange ratio of 8.5 Foncière des Régions shares per 1,000 Beni Stabili shares. 29 May 2018 Foncière des Régions releases its change of identity with its new commercial brand Covivio, with the willingness to confirm its European dimension and strengthen the common identity between the various countries. 15 June 2018 the ADP Group, as planner of the land and co-investor, and Foncière des Régions, as property developer and co-investor, have signed the agreements required for the construction of the second office building Belaïa, at the heart of Coeur Orly, the business district of the Paris-Orly airport. 12 July 2018 Foncière des Régions is awarded the Grand Prix Spécial du Jury at the Grand Prix de l Assemblée Générale 2018, which acknowledges the quality and relevance of the information provided at the combined general meeting of 19 April July 2018 Foncière des Régions unveils the results of the first round of the consultation of the architect contest in order to develop a high-height building of 70,000 square meters on a piece of land located on Alexanderplatz, at the heart of Berlin: Sauerbruch Hutton (Berlin) and Diener & Diener Architects (Basel). This general meeting is mainly called in the context of the project of merger by incorporation of Beni Stabili by Foncière des Régions (the Merger ), which is subject to your approval under resolutions 1 to 4. It will also be proposed to you, through the vote of the 5 th and 6 th resolutions, to adopt Covivio as new corporate name of the Company and to amend articles 2, 8.2, 25.3 and 25.4 of the articles of association. 2

3 I. Approval of the Merger (1 st, 2 nd, 3 rd and 4 th resolutions) This report sets out the main terms and conditions of the Merger, which are further detailed in the draft merger plan approved by the Boards of directors of Beni Stabili and Foncière des Régions respectively on 18 and 19 July 2018 (the "Merger Plan"). Mr. Michel LEGER, has been appointed as merger appraiser by the president of the commercial chamber of the regional court of Metz on 8 June 2018 in order to prepare the two reports set forth in Article L of the French Commercial Code respectively on the value of the assets and liabilities contributed and on the remuneration for the assets and liabilities contributed. Such reports will be presented to the general meeting. Mr. Michel LEGER will also issue an opinion on the number of shares of the Company to which, to following the Merger, the convertible bonds issued by Beni Stabili shall give right, in accordance with the provisions of Article L of the French commercial code. 1. Presentation of the companies A. Foncière des Régions Foncière des Régions is a joint stock company (société anonyme), with its registered offices in 18, avenue François Mitterrand, Metz, France, registered with the French register of companies of Metz under number The duration of Foncière des Régions is set until 1st December 2062, without prejudice to possible extension or early dissolution. Its financial year begins on 1 January and ends on 31 December of each year. Foncière des Régions has an issued share capital of EUR 225,835,737, divided into 75,278,579 ordinary shares with a par value of EUR 3 each. The shares of Foncière des Régions are publicly traded on a regulated stock exchange (Euronext Paris, compartment A). Foncière des Régions also issued (i) free shares, of which 488,367 were allotted and not yet vested on 30 June 2018, (ii) convertible bonds (Obligations à option de Remboursement en Numéraire et/ou en Actions Nouvelles et/ou Existantes (ORNANES)) with an annual return of 0.875% for a nominal amount of EUR 345,000,000 and repayable on 1 April 2019, and (iii) non-convertible bonds for a total amount outstanding at 31 December 2017 of approximately 1.7 billion euros. Foncière des Régions has not issued any bonds, equity securities or securities giving access to capital other than those above-mentioned. B. Beni Stabili Beni Stabili is a joint stock company (a società per azioni) incorporated and existing under the laws of the Republic of Italy with its registered offices in 38, via Piemonte, Rome, Italie, registered with the Italian register of companies (Registro delle Imprese) of Rome, Republic of Italia, under number The duration of Beni Stabili is set until 31 December 2100, without prejudice to possible extension or early dissolution. Its financial year begins on 1 January and ends on 31 December of each year. 3

4 Beni Stabili has an issued share capital of EUR 226,959,280.30, divided into 2,269,592,803 ordinary shares with a par value of EUR 0.10 each. The shares of Beni Stabili are publicly traded on the Milan Stock Exchange (Mercato Telematico Azionario) and also on a regulated stock market in France (Euronext Paris). Beni Stabili also issued (i) convertible bonds (200,000, per cent. Convertible Bonds due 2021) which are outstanding and listed on the ExtraMOT (Professional Market of Borsa Italiana) (the «Convertible Bonds»), and (ii) the following bonds which are not convertible, the «Euro 300,000, per cent. Notes due 20 February 2028» (the «2028 Notes»), the «Euro 300,000, per cent. Notes due 17 October 2024» (the «2024 Notes») and the «Euro 125,000, per cent. Notes due 30 March 2022» (the «2022 Notes» and, together with the 2028 Notes and the 2024 Notes, the «Notes»). Beni Stabili has not issued any bonds, equity securities or securities giving access to capital other than those above-mentioned. 2. Terms and conditions of the Merger A. Context On 19 April 2018, Foncière des Régions proposed to Beni Stabili a merger project based on an exchange ratio of 8.5 Foncière des Régions shares for 1,000 Beni Stabili shares (after the detachment of 2017 dividends). As part of the procedure for the approval of related-party transactions, the independent directors committee of Beni Stabili gave its favourable and unanimous opinion on the proposed merger on 24 May 2018, relying in particular on the fairness opinion issued by Lazard bank. The works council of the Economic and Social Union of Foncière des Régions was informed and consulted on the merger project and gave a favourable opinion on the proposed Merger on 23 May The works council's opinion is set forth in Schedule 2 to this report. In this context, Foncière des Régions and Beni Stabili entered into a merger agreement on 25 May 2018 to define their respective obligations with a view to implementing the Merger. Foncière des Régions has also granted to an investment service provider a mandate to acquire Beni Stabili shares, up to a maximum holding of %. At the date of signing of the Merger Plan, 19 July 2018, Foncière des Régions held 59,87 % of the capital of Beni Stabili. The Merger would be implemented in accordance with the terms and conditions agreed to in the Merger Plan. The new shares issued by Foncière des Régions in consideration for the Beni Stabili shares will be the subject of a request for admission to trading on the Euronext Paris regulated market, with the Euronext market company, as well as on the Milan stock exchange for all Foncière des Régions shares (Mercato Telematico Azionario). 4

5 B. Rationale for the merger This merger will continue the transformation of Beni Stabili initiated two years ago and confirms Foncière des Régions' investment strategy in Italy, focused on Milan and the development pipeline. It is also a major step in simplifying the Group's organisation and helps to strengthen the links between its various divisions. The Merger will also consolidate the group's status as an integrated European real estate operator and leader in its markets by strengthening its three strategic pillars, namely the focus on European capitals, real estate development and customer culture. The Merger will also simplify the procedures and legal requirements currently applicable, which will also reduce costs. The Merger should also strengthen the Company's profile on capital markets by increasing its market capitalization and broadening the free float. 3. Conditions precedent - Effective Date Completion of the Merger would be subject to the satisfaction (or, to the extent permitted by applicable law, waiver) of the following conditions precedent: (i) the approval of the terms of the Merger Plan by the general meeting of the shareholders of the Company; (ii) the approval of the terms of the Merger Plan by the general meeting of the shareholders of the Beni Stabili; (iii) the delivery by the clerk of the District Court of Metz (Tribunal d instance de Metz) and an Italian notary public of pre-merger compliance certificates regarding pre-merger acts and formalities; (iv) the delivery by the clerk of the District Court of Metz (Tribunal d instance de Metz) or by a French notary public of a legality certificate concerning completion of the Merger in accordance with article 128 of the Directive and article L of the French Commercial Code; (v) the approval for listing on Euronext Paris of the shares of the Company issued and allotted to the holders of Beni Stabili shares. Subject to satisfaction (or the waiver) of above conditions precedent, the effectiveness of the Merger from a legal, tax and accounting standpoint will be postponed until 11:59 pm on 31 December 2018 (the Effective Date ). 4. Designation and valuation of the assets and liabilities contributed Pursuant to regulation n of the French Accounting Regulation Authority (Autorité des normes comptables), as amended by regulation n of the same Authority, as the Company controls Beni Stabili, the assets and liabilities of Beni Stabili transferred to the Company in the context of the Merger will be recorded in the accounts of the Company at their net book value, which net book value shall be recorded as of the Effective Date pursuant to Article 7 of the Merger Plan. The Company shall record the assets and liabilities of the Beni Stabili in accordance with the accounting principles to which the Beni Stabili is subject (without prejudice to the harmonization 5

6 of the accounting and valuation methods applicable to the assets and liabilities following the Merger). The book value of the net assets will be transferred to Beni Stabili and the net assets will be translated in the accounts of the Company in Euros, upon the Effective Date. In the context of the Merger, Beni Stabili transfers to the Company, subject to the ordinary factual and legal conditions and subject to the conditions provided in this Merger Plan, all of its assets and liabilities (including all property, rights and powers of any description), it being understood that the lists set out below are provided for information purposes only and are not exhaustive, given that the assets and liabilities of Beni Stabili shall be transferred to the Company as they will be on the Effective Date. As the Company shall be assigned the assets and liabilities of Beni Stabili as from the Effective Date, and in accordance with regulation n of the French Accounting Regulation Authority, Beni Stabili s assets and liabilities that will have been transferred by universal succession of title to the Company will be recorded at their net book value as at the Effective Date in the Company s accounts. In this respect, in accordance with the opinion CU CNC n 2005-C, Beni Stabili has set up estimated accounts as of 31st December 2018 (the Estimated Accounts ) in order to provide an estimate of the net book value of the assets and liabilities transferred by universal succession of title to the Company by Beni Stabili at the Effective Date. The final book value of the assets and liabilities that will be transferred by universal succession of title to the Company and, as a consequence, the resulting net asset value thereof, will be determined on the Effective Date based on the final accounts of Beni Stabili as of the Effective Date, which will be set up by the board of directors of the Company and will be reviewed by its auditors. Assets contributed by Beni Stabili to the Company The assets contributed by Beni Stabili will be transferred by universal succession of title on the Effective Date. For information purposes only, the book value of the assets of Beni Stabili in the half year financial statements of Beni Stabili and in the Estimated Accounts are presented below: 6

7 (Data in thousands) BENI STABILI SPA SIIQ 30/06/2018 BENI STABILI SPA SIIQ FORECAST 31/12/2018 ASSETS Investment properties 2,392,250 2,230,398 Investments in equity affiliates 780, ,834 Other non-current assets 50,213 49,497 Total Non-Current Assets 3,222,910 3,094,729 Cash and cash equivalents 14,169 24,861 Assets held for sale 6,940 0 Inventories and work-in-progress 18,025 22,672 Other current assets 49,287 72,836 Total Current Assets 88, ,369 TOTAL ASSETS 3,311,330 3,215,099 Liabilities transferred by Beni Stabili to the Company The liabilities contributed by Beni Stabili will be transferred by universal succession of title on the Effective Date. For information purposes only, the book value of the liabilities of Beni Stabili in the half year financial statements of Beni Stabili and in the Estimated Accounts are presented below: (Data in thousands) BENI STABILI SPA SIIQ 30/06/2018 BENI STABILI SPA SIIQ FORECAST 31/12/2018 LIABILITIES Long -term borrowings 1,356,779 1,279,974 Other non-current liabilities 14,915 13,970 Total Non-Current Liabilities 1,371,695 1,293,944 Short-term borrowings 70,795 10,795 Other current liabilities 59,332 67,272 Total Current Liabilities 130,127 78,067 TOTAL LIABILITIES 1,501,821 1,372,011 7

8 In addition to the above liabilities, the Company would be transferred all the commitments of Beni Stabili constituting off-balance sheet commitments and, more generally, would be transferred all liabilities or obligations of Beni Stabili. Provisional net asset value On the basis indicated above, the book value of the net assets contributed by Beni Stabili to the Company pursuant to the Merger at the Effective Date of the Merger would amount, by way of illustration, to: - the net book value of the contributed assets: Eur 3,215,098,689, and - the net book value of the contributed liabilities: Eur 1,372,011,076, that is: - EUR 1,843,087,613. Given that the exact amount of the final net asset value of Beni Stabili will only be known after the Effective Date and in absence of a guarantee as to the amount of the final net asset value transferred to the Company, it has been decided, by common agreement of the Parties, that the provisional net asset value retained for the purpose of the Merger will be equal to the sum of the net asset value based on the Estimated Accounts (i.e. EUR 1,843,087,613) to which a 25% discount will be applied. Therefore, the provisional net asset value retained for the purpose of the Merger will be equal to EUR 1,382,315,710 (the Provisional Net Asset Value ). Determination of the final net asset value of Beni Stabili as of the Effective Date In order to determine the final net asset value of Beni Stabili as at the Effective Date (the Final Net Asset Value ), the Company will establish a balance sheet of Beni Stabili as of 31 December 2018 (the Definitive Accounts ). The Definitive Accounts will be approved by the competent bodies of the Company and will show the Final Net Asset Value. The difference between the Provisional Net Asset Value and the Final Net Asset Value will be treated as an adjustment to the Merger premium in accordance with the provisions of article 6 of the Merger Plan. 5. Consideration for the Merger A. Capital Increase (1) The assignment of the shares of the Company to the holders of the shares of Beni Stabili will be carried out through a capital increase of the Company of a maximum of 9,478,728 shares issued and allotted with a par value of EUR 3 per share (based on (i) an exchange ratio of 8.5 shares of the Company for 1,000 shares of Beni Stabili (the Merger Exchange Ratio ) subject to a possible adjustment of the Merger Exchange Ratio in accordance with the details set forth below, (ii) a maximum number of 205,423,172 shares of Beni Stabili that may be issued before the Effective Date as a consequence of the conversion of the Convertible Bonds and based on the conversion price in effect as of 19 July 2018 (as may be adjusted in accordance with the terms and conditions of the Convertibles Bonds), and (iii) without taking into account a possible capital increase of 8

9 Beni Stabili before the Effective Date in accordance with the provisions set forth in paragraph (4) below). (2) The Merger Exchange Ratio has been determined by the boards of directors of the Company and of Beni Stabili based on the valuation methods described in Schedule 1 and on a fully-diluted basis, taking into account a maximum number of shares equal to 78,273,034 for the Company and 2,475,015,975 for Beni Stabili, as set out in Schedule 9 of the Merger Plan. (3) In determining the Merger Exchange Ratio, the boards of directors of the Company and of Beni Stabili have also considered that the Company and/or Beni Stabili (as applicable) may take any of the following actions without triggering an adjustment of the Exchange Ratio: (i) the Company shall be entitled to grant new free shares up to a maximum number of 151,455 shares, (ii) the Company shall be entitled to issue new shares to allow conversion of the ORNANEs, (iii) Beni Stabili (or the Company where the withdrawals should be settled after the Effective Date) shall be entitled to purchase as many of its own shares (or the own shares offered in exchange where the withdrawals should be settled after the Effective Date) for which withdrawal rights will have been exercised as may be required to complete the liquidation procedure under applicable Law, (iv) Beni Stabili shall be entitled to issue new shares to allow the conversion of the Convertible Bonds in accordance with the relevant terms and conditions, and (v) the Company shall be entitled to issue shares, equity instruments or other instrument giving access to the share capital or voting rights of the Company with no preferential subscription rights attached to each share of the Company in accordance with and subject to the terms and conditions of the financial authorizations granted as of the date hereof to the board of directors of the Company by its shareholders meeting, up to an aggregate maximum number of securities corresponding to 10% of the share capital of the Company as of the date of the Merger Plan taking also into account all the shares, equity instruments or other instruments possibly issued under paragraph (4) below. (4) In determining the Merger Exchange Ratio, the boards of directors of the Company and of Beni Stabili have also considered that the Company and Beni Stabili shall also be entitled to issue shares, equity instruments or other instrument giving access to the share capital or voting rights of the Company or Beni Stabili, as the case may be, with a preferential subscription right attached to each share of the Company or Beni Stabili, as the case may be (rights issue), up to an aggregate maximum number of securities corresponding to 10% of the share capital of Beni Stabili or of the Company (as applicable) as of the date of the Merger Plan, and, where referred to the Company, taking also into account all the shares, equity instruments or other instruments possibly issued under paragraph (3)(v) above, provided that: (I) in the event of an issuance of shares in accordance with paragraph (4) above (rights issue) of the Company, the Merger Exchange Ratio shall then be adjusted to provide the holders shares of Beni Stabili with the same economic effect as contemplated by the Merger Plan prior to such event, by automatically amending the Merger Exchange Ratio as follows: Where: Z = 8.50 x S / Tfdr 9

10 Z shall be the recalculated Merger Exchange Ratio (i.e. the number of shares of the Company that each shareholder of Beni Stabili will receive in exchange for 1,000 shares of Beni Stabili); S shall mean the last price of the shares of the Company on Euronext Paris prior to the public announcement of the rights issue; Tfdr shall mean the theoretical ex-rights price of the shares of the Company ; and (II) in the event of an issuance of shares in accordance with paragraph (4) above (rights issue) of Beni Stabili, the Merger Exchange Ratio shall then be automatically adjusted as per the formula described under paragraph (6) below, in which case the Dbs component of the formula (as defined below) shall be replaced by the theoretical value of the right, as calculated based on (i) the last price of the shares of Beni Stabili prior to the announcement of the capital increase, minus (ii) the theoretical ex-rights price (TERP). (5) The Company and Beni Stabili have already paid to their respective shareholders the dividend relating to the financial year 2017 and this payment has been considered for the purposes of the Merger Exchange Ratio s determination. (6) In compliance with the requirements of the SIIQ regime, before the Effective Date, Beni Stabili may pay an interim dividend for the financial year 2018 pursuant to Art bis of the Italian Civil Code. In this event, the Merger Exchange Ratio shall be adjusted to provide the holders of shares of the Company or of shares of Beni Stabili, as the case may be, with the same economic effect as provided under this Merger Plan prior to such event, by amending automatically the Merger Exchange Ratio as follows: Where: Z = [S x 8.50/ Dbs] / [S/1000] i. Z shall be the recalculated Merger Exchange Ratio (i.e. the number of shares of the Company that each shareholder of Beni Stabili will receive in exchange for 1,000 shares of Beni Stabili); ii. S shall mean an amount of Eur 83.80, corresponding to the closing price of Eur for shares of the Company on Euronext on 19 April 2018 minus the 2017 dividend of Eur 4.50 per share of the Company; iii. Dbs total amount of dividend or other distribution (before any applicable withholding tax) per share of Beni Stabili paid or payable by Beni Stabili prior to the Effective Date (excluding the 2017 dividend already paid as of the date hereof). (7) No particular difficulty was encountered in preparing the valuation of the assets and liabilities transferred to the Company when determining the Exchange Ratio. 10

11 B. Fractional entitlements to transferee shares Any shareholder of Beni Stabili who, irrespective of any sale or purchase of shares of Beni Stabili before the Effective Date, does not hold a sufficient number of shares of Beni Stabili to receive a whole number of new shares of the Company (the Fractional Entitlements to Transferee Shares ), will be entitled - pursuant to a procedure consistent with applicable law - to receive, in addition to the whole number of shares of the Company resulting from the Merger Exchange Ratio, a cash consideration as a settlement for such Fractional Entitlements to Transferee Shares, the amount of which shall be determined by the intermediaries in accordance with applicable law. Without prejudice to the foregoing, only whole shares of the Company will be issued and allotted in connection with the Merger and the Company will deliver only whole shares to Beni Stabili s shareholders. Beni Stabili s shareholders who will hold, on the Effective Date, a number of shares of Beni Stabili not giving right to receive a whole number of new shares of the Company, shall be deemed to have expressly agreed to take part in the process of sale of the newly issued Company shares corresponding to such Fractional Entitlements to Transferee Shares as described hereafter. With a view to procure the funds to settle the Fractional Entitlements to Transferee Shares, it is proposed to you to approve a global sale of the newly issued shares of the Company which would not have been allocated and which would correspond to the Fractional Entitlements to Transferee Shares, upon expiry of a thirty (30) day period following the latest date of recording into the registers of the whole share(s) allocated to the relevant shareholders. The sale of the newly issued Company s shares shall take place on Euronext Paris through a financial intermediary listed under paragraphs 2 to 7 of article L of the French monetary and financial code. Such financial intermediary will be appointed to facilitate the payment of the net amount resulting from the sale of the newly issued ordinary shares corresponding to the Fractional Entitlements to Transferee Shares to the benefit of the relevant shareholders of Beni Stabili (notably the amount shall be net of any trading fees and any other fees which would relate to the sale of the newly issued ordinary shares corresponding to the Fractional Entitlements to Transferee Shares). The intermediary so appointed shall sell such newly issued shares of the Company on the regulated market Euronext Paris on behalf of shareholders of Beni Stabili taking part into this process, who shall in turn receive the net profit resulting from such sale pro-rata their stake in the mechanism. For the avoidance of doubt, no interest shall be paid in relation to the cash payment to be received by the relevant shareholders of Beni Stabili from the proceeds of the sale of the newly issued ordinary shares of the Company corresponding to the Fractional Entitlements to Transferee Shares, even in case of late payment of such amount. C. Merger premium / Adjustment of the merger premium The amount of the merger premium is equal to the difference between (a) the portion of the net asset value transferred by universal succession to the Company corresponding to the shares of Beni Stabili which are not held by the Company (excluding the book value of the treasury shares held by Beni Stabili) and (b) the nominal value of the share capital increase of the Company (the Merger Premium ). 11

12 The estimated Merger Premium amounts to Eur 525,872,414 based on (i) the portion of the Provisional Net Asset Value, and (ii) a capital increase of the Company of a maximum of 9,478,728 shares issued and allotted with a par value of EUR 3 per share (considering (i) a Merger Exchange Ratio of 8.5 shares of the Company for 1,000 shares of Beni Stabili subject to a possible adjustment of the Merger Exchange Ratio in accordance with the provisions of the Merger Plan, (ii) a maximum number of 205,423,172 shares of Beni Stabili that may be issued before the Effective Date upon the conversion of the Convertible Bonds based on the conversion price in effect as of 19 July 2018 (as may be adjusted in accordance with the terms and conditions of the Convertible Bonds), and (iii) without taking into account a possible capital increase of Beni Stabili before the Effective Date in accordance with the provisions set forth in paragraph 5(4)). The difference between the Provisional Net Asset Value (i.e. EUR 1,382,315,710, based on the Estimated Accounts and subject to a 25% discount) and the final net asset value will result in an adjustment of the Merger Premium, which final amount will also depend on the portion of the final net asset value transferred as of the Effective Date and the final amount of the share capital increase of the Company. It is proposed to you to resolve on the provisional amount of the Merger Premium and to grant the Board of Directors, with the option to sub-delegate, all powers to record the definitive amount of the Merger Premium on the Merger Effective Date. It is also proposed to you that you authorize the Board of Directors (with the option to subdelegate) to: - deduct from the amount of the Merger Premium the necessary amounts corresponding to 10% of the nominal amount of the capital increase to be added to the legal reserve, if necessary; - deduct from the Merger Premium any undisclosed or omitted liability in relation to the assets of Beni Stabili transferred to the Company; and - charge to the merger premium account all costs and expenses of whatever nature resulting from the completion of the merger, it being specified that the balance of the merger premium may be allocated at any time in accordance with the rules in force decided by the General Meeting. D. Boni/Mali de fusion The Merger gain/loss will be equal to the difference between (a) the portion of the Final Net Asset Value (excluding the book value of the treasury shares held by Beni Stabili) corresponding to the shares of Beni Stabili held by the Company as of the Effective Date and (b) the net book value of the shares of Beni Stabili held by the Company as of the Effective Date. 6. Effects of the Merger on Convertible Bonds As a legal effect of the Merger and in accordance with Article L of the French 12

13 commercial code, the Company shall undertake all the obligations in respect of the Convertible Bonds for which the conversion right has not been exercised prior to the Effective Date and, as from the Effective Date, the Convertible Bonds may be converted into shares of the Company. The terms and conditions of the Convertible Bonds (the Conditions ) are available on Beni Stabili s website ( In this context, Beni Stabili has appointed an independent financial advisor (the Independent Financial Advisor ) to carry out certain activities which, amongst other things, are necessary (but not in and of themselves sufficient) for the Merger to qualify as a permitted reorganisation under the Conditions. The Independent Financial Advisor shall be in charge, inter alia, to determine (i) the appropriate conversion price which will be applicable to the conversion of the Convertible Bonds into ordinary shares of the Company following the consummation of the Merger (the Initial Transferee Company Conversion Price ), and (ii) if the other changes made to the Conditions in the context of the Merger are appropriate. On the basis of the Merger Exchange Ratio and subject to the possible adjustment of the Merger Exchange Ratio, the Independent Financial Advisor has determined that it would be appropriate to determine the Initial Transferee Company Conversion Price in the Conditions, as amended and restated upon the effectiveness of the Merger (the Restated Conditions ), as follows: Initial Transferee Company Conversion Price = ACP XR Where: ACP means the applicable conversion price immediately before consummation of the Merger (as may be adjusted prior to the Effective Date in accordance with the Conditions); and XR means 1000/8.5 (as such fraction may be adjusted in case of an adjustment of the Merger Exchange Ratio in accordance with the Merger Plan) Due to the manner in which the Restated Conditions may be drafted, it may be necessary to also determine a further conversion price (the Alternative Change of Control Price ) which would apply during a period equal to the Change of Control Period (as defined in the Conditions), and which would need to be determined pursuant to the formula set out in Condition 6(b)(x) but assuming for this purpose that: COCCP means the Alternative Change of Control Price; and OCP means the Initial Transferee Company Conversion Price. Whilst the Independent Financial Advisor has not seen a draft of the Restated Conditions, in 13

14 principle, he believes that in the event the Restated Conditions include the concept of an Alternative Change of Control Price which would apply during a period equivalent to the Change of Control Period, the approach set out in the preceding paragraph for the calculation of the Alternative Change of Control Price would be appropriate. By way of illustration, and based on the current Merger Exchange Ratio and on the conversion price in effect as of the date hereof (EUR ): the Initial Transferee Company Conversion Price would be EUR ; and in the event an Alternative Change of Control Price is required to be determined as aforesaid and the date on which the Change of Control (as defined in the Conditions) occurs were to be the Effective date, such Alternative Change of Control Price would be EUR The Merger will also trigger a Change of Control within the meaning of the Conditions and therefore, bondholders will be entitled to put one or more of their Convertible Bonds requiring the Company to redeem them on the 14 th calendar day after the expiry of the Change of Control Period, unless an Independent Financial Advisor issues and delivers a confirmation opinion stating that the Change of Control is not, in its opinion, materially prejudicial to the interest of the bondholders (provided that, for the avoidance of doubt, the Parties intend to appoint such Independent Financial Advisor in order to have delivered, as the case may be, such confirmation opinion). The current conversion price of the Convertible Bonds may be adjusted until the Effective Date in accordance with Condition 6(b). As from the Effective Date, the Initial Transferee Company Conversion Price will also be subject to possible adjustments in accordance with the terms and conditions which will be provided in the Restated Conditions. Notwithstanding the foregoing, the Conditions provide that: Beni Stabili (and, after the Effective Date, the Company, subject to the terms and conditions of the Restated Conditions) may, upon the exercise of a conversion right, make an election to pay a Cash Alternative Amount (as defined in the Conditions) instead of delivering shares; the delivery date of shares shall be (i) the last dealing day of a month if the conversion notice is delivered on or before the 15th calendar day of that month, or (ii) the 10th dealing day of the calendar month immediately following the calendar month in which the conversion notice is delivered if the conversion notice is delivered from the 16th calendar day up to and including the last calendar day of a month. As a result, any conversion notice delivered as from 16 December 2018 will give rise to the delivery of shares of the Company (subject to (i) the other terms and conditions of the Conditions, including the Cash Alternative Election, and (ii) the terms and conditions of the Restated Conditions). 7. Beni Stabili s shareholders withdrawal right Within 15 days from the registration of the minutes of the extraordinary shareholders meeting of 14

15 Beni Stabili approving this Merger Plan, shareholders of Beni Stabili who did not contribute to the approval of this Merger Plan will be entitled to exercise their withdrawal right from Beni Stabili pursuant to: (i) (ii) article 2437, paragraph 1, letter (c) of the Italian Civil Code, given that, as a consequence of the Merger, Beni Stabili s registered office is to be transferred outside Italy; article 5 of Legislative Decree 108/2008, given that the Company is subject to the laws of a country other than Italy (i.e. French law). Notice of the registration will be published in accordance with the Italian laws, including on Beni Stabili s web-site. The redemption price payable to shareholders, calculated in accordance with the criteria set out in article 2437-ter of the Italian Civil Code, is Eur for each share of Beni Stabili in relation which the withdrawal rights will be exercised (the Redemption Price ). The Redemption Price is equivalent to the arithmetic average of the daily closing price (as calculated by Borsa Italiana S.p.A.) of the ordinary shares of the Beni Stabili for the six-month period prior to the date of the publication of the notice for convening Beni Stabili shareholders meeting. The Redemption Price will be received through the relevant depositaries of the withdrawing shareholders. From the date of receipt of a withdrawal notice from shareholders of Beni Stabili in accordance with article 2437-bis of the Italian Civil Code, those shareholders will not be entitled to exercise the economic rights relating to the shares for which the withdrawal has been exercised (including, for the avoidance of doubt, the right to dividends, interim dividends and distributions resolved and paid the withdrawal). The effectiveness of a withdrawal and the payment of the Redemption Price is subject to the satisfaction of (or, to the extent legally permissible, waiver to) the Conditions Precedent set forth in paragraphs 3 (i) to (iv) above, being understood that the transfer of the withdrawing shareholders shares will be carried on the date of payment of the Redemption Price, in accordance with the modalities described below. Pursuant to article 2437-quater of the Italian Civil Code, Beni Stabili shares on which the withdrawal right is exercised will be offered in priority (through an option or preemption right) to the other shareholders of Beni Stabili proportionally to the number of shares held by each of them, as well as to the holders of Convertible Bonds based on the Merger Exchange Ratio. If the shareholders of Beni Stabili and/or the holders of Convertible Bonds, as the case may be, have not acquired all of the shares for which a withdrawal right has been exercised, Beni Stabili will be entitled, at its discretion, to offer the remaining shares to third parties in accordance with the applicable laws. In accordance with the applicable laws and regulations, Beni Stabili also reserved the right, at its discretion, to negotiate purchase commitments of the shares by third parties (including shareholders, banks or financial intermediaries), possibly also after completion of the settlement procedure for the shares of withdrawing shareholders, in any event prior to the Effective Date. Any shares remaining unsold will be either purchased by Beni Stabili prior to the Effective Date (without prejudice to the possible sale of the shares prior to the Effective Date) 15

16 and/or by the Company after the Effective Date in accordance with the law, in any case without prejudice to any third parties purchase commitments. Subject to the satisfaction (or waiver, to the extent legally permissible) of the Conditions Precedent described in paragraphs 3 (i) to (iv) above, the cash liquidation of the Beni Stabili shares for which the withdrawal right is exercised will be carried out as follows: (i) (ii) if all of the shares are purchased (a) by other shareholders of Beni Stabili (other than the Company) and/or by holders of Convertible Bonds by exercising their option and/or pre-emption rights, and/or (b) by any third parties, then the Redemption Price shall be paid in favour of all the withdrawing shareholders within the Effective Date; otherwise, if a portion of the shares remains unsold after the offers in option and/or pre-emption and/or in favour of third parties, Beni Stabili and the Company reserve the right, to the extent applicable, to provide that the Redemption Price is paid in favour of all withdrawing shareholders in two tranches, the first of which shall be paid before the Effective Date, while the second of which shall be paid after the Effective Date, in any case proportionally to the number of shares in relation to which the withdrawal right has been exercised, in any event without prejudice to any third parties purchase commitments. 8. Consequences of the Merger for shareholders, employees and creditors A. Consequences for shareholders The impact of the capital increase resulting from the Merger for the holder of 1% of the Company's share capital before the Merger (based on (i) an exchange ratio of 8.5 Company shares for 1,000 Beni Stabili shares (subject to a possible adjustment of the Merger Exchange Parity in accordance with the provisions of the Merger Plan, (ii) the number of Beni Stabili shares held by the Company and by Beni Stabili on the date of the Merger Plan, and (iii) without taking into account a potential capital increase of Beni Stabili or the Company before the Effective Date) is as follows: 16

17 Percentage held on a non-diluted basis Percentage held on a diluted basis ( * ) Before the capital increase resulting from the Merger After the capital increase resulting from the Merger and without taking into account the Beni Stabili shares which may be issued before the Effective Date as a result of the Convertible Bonds After the capital increase resulting from the Merger and taking into account a maximum of 205,423,172 Beni Stabili shares likely to be issued before the Completion Date as a result of the Convertible Bonds 1% 0,962% 0,907% 0,875% 0,888% 0,858% (*)Taking into account (i) the outstanding free shares allocated but not vested on 30 June 2018 (i.e. 488,367 free shares) and (ii) the shares which may be issued upon the reimbursement of the ORNANE. B. Impact of the Merger on the employees of the Company The Merger is not expected to have a significant impact on employment. The works council of the Economic and Social Union of Foncière des Regions was informed and consulted on the Merger project and gave a favourable opinion on the Merger project on 23 May Beni Stabili and the Company will also begin the consultation and information procedures of works councils required under Italian law by Article 47 of Law No. 428/1990, which will be completed before the Effective Date. C. Impact of the Merger on the creditors of the Company It is specified, for the avoidance of doubt, that the Company's creditors (who are not bondholders) whose claim is prior to the publication of the Merger Plan may file an opposition under the conditions provided for in Article L of the French Commercial Code. In accordance with Article L of the French Commercial Code, the general meeting of bondholders may grant a mandate to the representatives of the group to oppose the Merger under the conditions provided for in Article L of the French Commercial Code. In accordance with legal provisions, an opposition filed by a creditor will not have the effect of prohibiting the continuation of the Merger operations. D. Impact of the Merger on Beni Stabili s creditors 17

18 In accordance with the provisions of Article 2503 of the Italian Civil Code, Beni Stabili's creditors (including bondholders) may object to the Merger within 60 days following the date of registration of the resolutions of the extraordinary general meeting of Beni Stabili approving the Merger Plan with the register of companies of Rome. For the purposes of Article 2503-bis, paragraph 1, of the Italian Civil Code, no special meeting of bondholders shall be convened by the board of directors of Beni Stabili to approve the Merger. II. Change of corporate name and subsequent amendment of article 2 of the articles of association (5 th resolution) Foncière des Régions has significantly evolved since its creation twenty years ago. Although it has been historically focused on France and office, the Company is now operating at the heart of the major European cities, on several categories of real estate assets, and acts as a global operator all along the real estate work chain. Therefore the Company has decided to make its identity evolve and its brand, who became Covivio. In order to make the identity and the brand consistent with each others, it is proposed, through the vote of the 5 th resolution, that you adopt Covivio as the new corporate name of the Company and subsequently amend article 2 of the articles of association. III. Amendment of articles 8.2, 25.3 and 25.4 of the articles of association (6 th resolution) It is proposed that, in the context of the 6 th resolution, you amend articles 8.2, 25.3 and 25.4 of the articles of association of the Company in order to take into consideration the provisions governing the tax regime of the real estate investment companies in Spain SOCIMI. In a manner similar to the SIIC regime in France, the Spanish SOCIMI tax exoneration regime provides for the application of the withholding on the distribution of dividends paid to shareholders who hold directly or indirectly a certain percentage in the distributing company and who do not provide evidence that they are subject to a minimum tax rate on such dividends. The articles of association of the Company, which already set forth provisions relating to the 20% withholding application mechanism provided by the SIIC regime, will be amended to take into consideration the 19% withholding provided by the SOCIMI regime which is applicable to the shareholders (either natural or legal persons) (i) who hold directly or indirectly at least 5% of the dividend rights of the distributing SOCIMI and (ii) who do not provide evidence that they are subject to a tax rate of at least 10%. In a manner similar to the 20% withholding, an indemnification mechanism of the distributing company by the shareholder liable for the withholding is implemented. In order to avoid the application of this 19% withholding, the shareholders will have to communicate before the dividend distribution by the SOCIMI a certificate of residence and a certificate evidencing that the dividends received are subject to a tax rate of at least 10%. 18

19 Articles Former drafting Revised drafting Article Any shareholder other than a natural person who comes to hold, directly or through entities that he controls pursuant to Article L of the French Commercial Code, a percentage of rights to Company dividends at least equal to that mentioned in Article 208 C II ter of the French General Tax Code (a Concerned Shareholder ) must register all the shares that he owns in registered form and ensure that the entities he controls under Article L of the French Commercial Code register all their shares in registered form. Any Concerned Shareholder who has not performed these obligations at the latest on the second working day prior to a General Meeting shall have the voting rights he holds, either directly or via entities he controls under Article L of the French Commercial Code, capped at a tenth (1/10) of the number of shares that they hold, respectively, at the relevant General Meeting. The Concerned Shareholder referred to above shall recover all of the voting rights attached to the shares he holds, directly or via entities he controls under Article L of the French Commercial Code, at the following General Meeting, provided that he regularises his situation by registering all the shares he holds, directly or via entities he controls within the meaning of Article L of the French Commercial Code, in registered form, by the second working day prior to this General Meeting. 8.2 (i) Any shareholder other than a natural person who comes to hold, directly or through entities that it controls pursuant to Article L of the French Commercial Code, a percentage of rights to Company dividends at least equal to that mentioned in Article 208 C II ter of the French General Tax Code; and (ii) any shareholder who indirectly holds, through the Company, a percentage of the share capital or dividend rights of listed real estate investment companies in Spain (the "SOCIMI") at least equal to that referred to in Article 9.3 of Law 11/2009 of the Kingdom of Spain dated 26 October 2009 (the "Law 11/2009"); (together a Concerned Shareholder ) must register all the shares of the Company that it owns in registered form and ensure that the entities it controls under Article L of the French Commercial Code register all their shares of the Company in registered form. Any Concerned Shareholder who has not performed these obligations at the latest on the second working day prior to a General Meeting shall have the voting rights it holds, either directly or via entities it controls under Article L of the French Commercial Code, capped at a tenth (1/10) of the number of shares that they hold, respectively, at the relevant General Meeting. The Concerned Shareholder referred to above shall recover all of the voting rights attached to the shares of the Company it holds, directly or via entities it controls under Article L of the French Commercial Code, at the following General Meeting, provided that it regularises its situation by registering all the shares it holds, directly or via entities it controls within the meaning of Article L of the French Commercial Code, in registered form, by the second working day prior to this General Meeting. Article Any Concerned Shareholder whose own situation or whose situation of his partners makes the Company liable for the withholding (the Withholding ) as referred to in Article 208 C II ter of the French General Tax Code (a Shareholder subject to Withholding ) shall be 25.3 Any Concerned Shareholder whose own situation or whose situation of its partners makes: (i) the Company liable for the withholding (the